Oil prices took a heavy hit yesterday amid a broader selloff in financial markets. After trading lower this morning, oil prices have regained their previous levels. Crude oil is currently trading at $52.74, with losses turning to small 10 cent gains after the product lost roughly $1.40 yesterday.
Fuel prices have also turned a bit higher in afternoon trading. Diesel prices are trading at $1.9098, up 0.9 cents. Gasoline prices are at $1.4439, up 1.8 cents since yesterday’s close.
Weak financial markets came yesterday after an EU report sharply reduced growth expectations for the Eurozone, cutting 2019 growth forecasts from 1.9% to just 1.3%. The group also revised its 2020 growth forecast slightly lower. Concerns that Brexit negotiations will not be resolved are weighing on European businesses, causing them to forego investments until the business climate is more certain.
Also contributing to economic fears are reports that Trump will not meet with Chinese President Xi Jinping before the March 2 deadline for trade talks, which increases the likelihood that the US will increase tariffs on $200 billion of Chinese imports. Trump originally delayed the tariff hike, which brings rates from 10% to 25% on Chinese goods. A deal could feasibly be reached without Trump or Xi present, but its political prospects are slim.
It appears Russia is sending some aid to Venezuela in the form of crude diluent, a light-end product allowing Venezuela’s heavy crude to flow more effectively. America was the dominant supplier of diluents to Venezuela, but sanctions have made those purchases impossible. Russia’s life-line may help Maduro maintain power for a bit longer, but sanctions are still having a heavy economic impact. In other Venezuelan news, over 20 tankers are stranded in the US Gulf Coast, containing roughly 9.6 million barrels of Venezuelan oil. Until sanctions are lifted, these tankers may sit idle, or may be re-routed to other countries.